Cina Central Bank gives RMB1 trillion special gift to government

 

China’s fiscal spending spree to be bolstered by ‘very special’ 1 trillion yuan payment from central bank

• Such payments, while typically not so high, are required by law in China but had been suspended for two years to help institutions cope with the pandemic downturn
• Fund transfer is in line with Beijing’s monetary policy loosening, and investment bank says: ‘This year’s fiscal expansion has rarely been seen in the past decade’

The sudden announcement that China’s central bank will transfer 1 trillion yuan (US$158.3 billion) to help fuel the government’s fiscal-expansion goals has given rise to questions about the breadth of Beijing’s policy toolkit.

And analysts are wondering what policymakers’ next move might entail if economic expansion – more government spending – fails to meet Beijing’s expectations.

Experts tend to believe this is just one of many reserve tools that Beijing is considering as it attempts to defend its national economic growth target for 2022 of 5.5 per cent – a figure that could be threatened by a protracted war in Ukraine, as well as by lingering tensions with the United States and European Union.